Best tips to save foreign currencies

International students are struggling with the rise of stronger foreign currencies.

Recently, the Malaysian ringgit fell to a 24-year low. Look West, and you’ll find that the Indian rupee depreciated to an all-time low rate — hitting the 80 rupee mark against US$1. Elsewhere, the naira-dollar exchange rate was valued at 620 nairas per dollar.

If you are worried about the financial situation in your home country, we understand. The good news is that there are ways to save foreign currencies as an international student so you can soften the blow of a weakening currency. 

With that said, here’s how what you can do to save foreign currencies while studying abroad:

Currency rates fluctuate constantly, so be sure to monitor for the best rates when you are buying a foreign currency. Here’s a handy tip: buy them before you study abroad. Source: Michael M. Santiago/Getty Images North America/Getty Images/AFP

4 ways to save foreign currencies while studying abroad

1. Monitor exchange rates and buy foreign currencies in your home country

The first step to winning the currency war starts at home. Buying foreign currency in your home country is better than exchanging money abroad or using a foreign debit and credit card. 

Always compare the exchange rate locally. Depending on the currency and city you are in, the difference between one currency exchange company and another can easily be as high as 6%. Use apps like WISE or BookMyForex to compare exchange rates, save time and avoid stress due to rate fluctuations. 

2. Carry a foreign exchange card while studying abroad

Wonder what is a foreign exchange card (FEC)? It is a prepaid card that you can load with cash of your local currency, which is converted into an equivalent foreign currency depending on your country of choice.

An FEC comes with insurance coverage in case of loss, fraud or theft. You can also preload a foreign currency into the FEC using the conversion rate during the transaction. That rate will be frozen and will not change in subsequent transactions.

You (or your parents) can instantly reload the card with money through Prepaid NetBanking. If you are worried about overspending, place a spending limit on your FEC.

HSBC is one of the best bank accounts for international students studying in the UK. Source: Tolga Akmen/AFP

3. Set up a local bank account as an international student

Take a look at the checklist sent by your university. Chances are, they would recommend setting up a local bank account — and there’s a good reason for this.

Student-friendly bank accounts can help cut any fees you might incur upon withdrawal from an automatic bank machine (ATM). Unis prefer to pay students working part-time on campus through a local bank account too.

Some bank accounts have a generous 0% overdraft, interest on positive balances, low fees for overspending, and cash or rewards for opening or regularly depositing into the account. Consider if the bank has a local branch and smartphone app so you can conveniently withdraw money, view your balance and manage your finance.

4. Watch out for money transfer rates and charges

Let’s face it: the unexpected happens and you might need a little bit more money while studying abroad. 

If you are paying your tuition fees via instalments, it’s a great idea to know the best platform to transfer money at cheap rates and save you from many charges.

Consider using WISE for small to medium-sized transfers to international bank accounts or OFX, a foreign exchange broker, for transfers above US$50,000, as this service is the cheapest way to transfer money internationally at these amounts.